Many early Nvidia (NASDAQ: NVDA) investors have become millionaires. While new investors definitely wish they had bought shares earlier, the stock is still trending higher. It’s up by 25% over the past year.
While this stock isn’t going to double or triple in a single year again, it’s still outpacing most growth stocks. Combine that with fundamental business growth that is outpacing those stock gains, and it’s still possible for Nvidia to turn new investors into millionaires.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
AI chip demand is still surging
Nvidia became a household name because of its AI chips, and sales of those semiconductors have not shown any signs of slowing down. High demand from tech giants has helped Nvidia command high profit margins and deliver record revenues.
The company’s fiscal 2027 first-quarter results encapsulate the ongoing demand picture. Revenue rose by 85% year over year to $81.6 billion. Guidance for its fiscal 2027 second-quarter is for $91 billion in revenue, which would be more than 10% sequential growth.
Net income more than doubled in the period as well, resulting in a net profit margin above 70%. It’s difficult for any company to deliver those types of numbers; Nvidia shareholders have gotten used to them.
The rising use of agentic AI and physical AI will only boost the demand for Nvidia’s GPUs. The chipmaker even hired an orbital data center system architect, showing that it’s priming itself to supply chips to companies that have ambitions to deploy cloud servers on orbiting satellites. Between its strong positioning for the present moment and its investments to capture future opportunities, Nvidia is set up to provide solid returns to long-term investors, even those who have only recently started to accumulate shares.
Nvidia’s valuation is cheap
Valuation can make or break a stock thesis. A low P/E ratio can make a decent company look like a compelling buy, while mounting losses and a high price-to-sales ratio can make a promising company a bad investment.
Nvidia has growth rates and a long-term trajectory that any company would love to have. However, it also trades at a surprisingly low P/E ratio of 30. For the sake of comparison, Walmart (NASDAQ: WMT) has a 39 P/E ratio, and it’s not reporting growth rates or profits anywhere close to Nvidia’s.
